Company Update

07 Februari 2023

Fixed Income Report February 7, 2023

Global Market Update
• Yields on the benchmark UST note increased along the curve yesterday. Yield on the benchmark 10-year note rose 12 bps to 3.65%.
• On the other hand, the shorter yield of 2-year note increased 18 bps to 4.48% on Monday (02/06/23).
• Yields are persistently rising recently after stronger than expected job market data release that may reaffirm Fed’s hawkish move.
• US stock indices fell following the rise in government bond yields. The DJI edged lower of 0.10%, while S&P 500 and Nasdaq Composite dropped 0.62% and 1.00% respectively.
• Euro Area retail sales was reported a contraction of -2.7% QoQ/-2.8% YoY. Retail sales contraction was deeper than consensus estimate of -2.5% QoQ/-2.7% YoY.

Domestic Market Update
• Yield on the benchmark 10-year (FR0096) increased 14 bps to 6.67% on Monday (06/02/23).
• The benchmark government bond prices weakened in response to rising UST note yield as well as IDR depreciation and rising CDS.
• The IDR depreciated against USD and was closed at IDR15,055/USD yesterday after previously closed at IDR14,894/USD.
• Indonesia’s 5-year CDS increased to above 80 bps and was closed at 83.59 bps yesterday.
• Statistics Indonesia reported domestic economy grew +5.01% YoY in 4Q22. Indonesia’s GDP growth was higher than our/consensus estimate of +4.96%/4.92% YoY.
• Indonesia’s FY22 GDP expanded 5.31% YoY, the fastest since 2013 on the back of strong consumptiona nd investment driven by windfall from commodity.

Market Projection
• Given the recent development on global and domestic market, we expect the 10 year Indo GB yield to move within a range of 6.60-6.80% for today.
• Attractive Indo GB series to be traded today : FR0070, FR0077, FR040, FR0078, FR0085, FR0054, FR0096, FR0045, FR0050.

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